Ariel Jona is an advocacy intern at CASE.

How would current proposals for tax reform impact charitable giving? Do Americans need a tax incentive to donate to charitable organizations or would they donate regardless? Who are the individuals who would be most affected by changes in tax code related to charitable giving?

These were a few of the questions discussed by a panel of nonprofit leaders at a June 28, 2017, Capitol Hill briefing on the impact of tax reform on charitable giving. CASE co-hosted the packed briefing, which was organized by the Council on Foundations and Independent Sector.

The impetus for the briefing was the recent release of Tax Policy and Charitable Giving, a study commissioned by Independent Sector and conducted by the Lilly Family School of Philanthropy at Indiana University. The study found that current tax reform proposals would significantly decrease charitable giving “by as much as $13.1 billion.” The study also indicated that expanding the charitable deduction increases charitable giving and that tax incentives affect giving to religious organizations as well as other charities.

Rep. Danny Davis (D-IL) speaks during the June 28, 2017, briefing on the charitable giving deduction. Photo courtesy of the Council on Foundations.

Representative Danny Davis (D-IL) opened the briefing by voicing his support for charitable giving. Rep. Davis, a member of the House Ways and Means Committee and the House Philanthropy Caucus, spoke about how communities are positively affected by charitable giving.

During the briefing, panelists John Ashmen and Heather Noonan discussed their views on how various tax reform proposals would affect giving:

• As president of the Association of Gospel Rescue Mission, John Ashmen knows firsthand the impact that faith-based charitable organizations make across the country, usually without taking any state or federal money. Ashmen spoke about the huge number of communities that would be negatively impacted as a result of the decrease in charitable giving.
• Heather Noonan from the League of American Orchestras discussed how individuals and communities would be directly affected by a decline in giving. She described how private support for nonprofits affects individuals every day. She brought this principle to life by sharing the story of Josh Grandy, who took part in OrchKids as a student. OrchKids, a music program for youth in Baltimore, Maryland, neighborhoods, gave Grandy the opportunity to learn the cello. He went on to become an accomplished cellist, performing with Yo-Yo Ma, at the Verizon Center, and an NFL game. Grandy’s experience reaffirmed the importance of charitable giving and the potential consequences of any decrease in giving due to changes in the tax code.

To mitigate unintended negative consequences of tax reform on charitable giving in communities across the country, panelists agreed that Congress should enact a universal charitable deduction as part of tax reform. Such a proposal would make the charitable deduction available to all taxpayers and increase giving to educational institutions and other charities. The Independent Sector study found that a universal charitable deduction enacted as part of tax reform would generate $4.8 billion in additional giving. CASE strongly supports the universal charitable deduction.

As the tax reform debate ramps up on Capitol Hill, CASE will continue to urge lawmakers to preserve and protect the full scope and value of the charitable deduction by enacting a universal charitable deduction. CASE members can receive more frequent updates on tax reform and other legislative issues affecting advancement by joining the CASE Advocacy Network.